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Yemen LNG seeking higher LNG prices from Kogas

LNG Industry,

Yemen’s foreign minister, Abu Bakr al-Quibi, has stated that Yemen intend to take ‘any legal steps necessary’ to ensure that Yemen LNG negotiates a higher LNG price with Korea Gas Corp. It has been alleged that the price at which Yemeni LNG is sold is unfair and is below the level at which neigbouring states, such as Oman and Qatar are selling their LNG.

This row over LNG prices first came up on June 15th when members of the Yemeni cabinet informed the South Korean ambassador they wanted to renegotiate the price at which Yemeni LNG was sold. However, at the time Yemen LNG’s Managing Director, François Rafin, said that it would honour its contracts with its clients.

The contract with Kogas is legally binding, but the foreign minister said his government would examine its legal options if Kogas was unwilling to renegotiate. The foreign minister declined to state how Yemen would seek redress over the perceived low prices but did say that, “In that agreement there is also the right of the parties to address issues that may create a disadvantageous situation for one side or the other.”

Yemen LNG is a very important source of revenue for the impoverished Arab nation and no doubt this decision to renegotiate prices has been influenced by Yemen’s falling export revenues from it’s dwindling oil supplies.

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